"Promoting housing affordability by combating exclusionary housing policies"

 

CFC # 41863 (Combined Federal Campaign) 

February 9, 2012


TO:       HERNDON TOWN COUNCIL
FROM: TOM LOFTUS, PRESIDENT
              Equitable Housing Institute
RE:       Revised Metro Station Area Plan, Comprehensive Plan Amendment, CPA #11-02 -- Public Hearing scheduled for Feb. 14

 

The latest Metro Station Area Plan recommended by the Town’s Planning Commission on Feb. 6, 2012, improves the traffic analysis, but it should not be adopted without changes to its housing provisions. Neither the consultants’ revised study (December 14, 2011 (“Draft #3”)) nor the Planning Commission’s new recommendations adopting it address the essential problems with the previous recommendations, as to housing (about which we wrote you on October 27 (copy attached)). For example, the current recommendations would:

  1. Increase traffic congestion to an unnecessary degree by not including enough housing;
  2. Increase the housing shortage in the Town and drive up housing costs for low- and moderate-income residents to an unnecessary degree;
  3. Encourage no affordable residential units for low- and moderate-income residents or workers -- whereas Fairfax County and various other Northern Virginia jurisdictions require some affordable units in large, new residential developments;
  4. Continue the major mistakes that George Mason University’s experts have identified regarding local governments’ planning for housing; and 
  5. Perpetuate the Town’s apparent noncompliance with the Virginia Code planning requirements regarding affordable housing.


We believe it is not necessary to immediately adopt the very high densities the consultants now recommend throughout the 38-acre core South of Herndon Parkway, in order to incentivize sufficient redevelopment near Metrorail. Nor do we believe that the Town must follow the consultants’ new recommendation to maintain the existing zoning prohibition on housing and density in the rest of the original, 183-acre study area. All these points are explained below.

 

Many of the Town’s residents are becoming concerned about these issues. There is plenty of time for the Town Council to get the housing elements of the plan right before amending the Comprehensive Plan. For example, before completing its Metrorail-area plans, Reston is fully assessing whether it can include enough housing in those areas to accommodate even more workers than the 42,000 or so new workers that it hopes to attract.1  (That would improve the overall jobs-housing ratio in Reston, which now is about 3:1 -- similar to the Town of Herndon.) One of Reston’s stations is scheduled to open in 2013 – several years before the Town’s Metrorail station is scheduled to open.

 

  1. The recommendations would increase traffic congestion to an unnecessary degree by not including enough housing

 

Residences within walking distance from jobs (or at least within convenient commuting distance by mass transit) are essential to minimizing vehicle trips in and out of an employment center. That commonsense conclusion is supported by many studies.

 

However, the current Herndon recommendations include only enough housing to accommodate about 20% as many workers as the Town hopes to draw to the reduced, 38-acre core area (“HTOC”) now being considered. And there apparently is no guarantee that any new or existing Herndon workers would be able to purchase or rent housing there. For example, that area predictably would be in great demand by high-paid professionals who commute by Metrorail to points such as Alexandria and the District of Columbia.

 

Clearly, the current proposal would lead to increased traffic on all of the Town’s main streets, given that the vast majority of up to 13,425 new workers would be commuting from elsewhere. More housing near the Metrorail station would reduce that traffic.


An erroneous assumption –that the newly-recommended
development levels are necessary to incentivize redevelopment

 

A lynch-pin of the consultants’ recommendations apparently is that a FAR (floor area ratio) in the range of 3.8 to 4.3 should be adopted now throughout the 38-acre core South of Herndon Parkway. And for that reason, the traffic generated by that predominantly-commercial development precludes any housing or other redevelopment in the rest of the original, 183-acre study area. According to the consultants, before any redevelopment is permitted in that outer area, another extensive planning process would be needed – and County and State agencies would have to be brought on board and contribute to the solution. That planning process should not even begin until after Metrorail arrives, in 2016 or later – according to the consultants.3 

 

But we have found no statement or showing that FAR’s in the 3.8-4.3 range are necessary throughout the core area to incentivize the desired redevelopment. No consultant or official said so at the Jan. 23 community meeting, to our knowledge -- despite direct questions as to what density will be necessary there.4  The closest that anyone came, that we heard, was a consultants’ (“VHB”) representative who stated to the effect that at less than that range of density, the “numbers don’t pencil out.”

 

What does that expression mean? It sounds to us like developer talk for “we’d like higher profits.” Of course they would – other things being equal. But the only solid indication we have found of the minimum density sufficient to incentivize the desired redevelopment is the one repeated in Draft #3 at p. 121 (col. 3): “financial studies conducted in 2011 for the HTOC showed no likelihood of redevelopment before 2035 under densities of 2.5 or less.” (Emphasis added) The 3.8-4.3 FAR range is 50%-72% greater than that.

  

Furthermore, one of the first options that Herndon residents were asked to consider in this planning process was Area Plan #1, with densities averaging 2.5 FAR “for the area closets [sic, closest] to the Metro Station.” 5 Area Plan #1 also called for substantial housing development North and East of Herndon Parkway. Area Plan #1 apparently was presumed to be feasible at that time. We don’t believe that redevelopment at 3.8-4.3 FAR is an “all or nothing” proposition.

 

2. The recommendations would increase the housing shortage in the Town and drive up housing costs for low- and moderate-income residents to an unnecessary degree


Herndon deserves credit for having some housing, subsidized by Fairfax County, that is affordable to households with annual incomes of $80,000 or below, and other housing that is affordable to households that have incomes between $80,000 and $120,000. However, housing costs in the Town still are much higher than necessary for most residents, and Metrorail’s arrival will exert more upward pressure on them. There isn’t nearly enough housing in the Town to minimize that upward pressure.6

 

In early 2008, there were about 3.25 jobs for each housing unit in the Town of Herndon.7  By contrast, the generally recommended target standard is one housing unit for every 1.5 jobs in the community, according to a recent American Planning Association advisory.8  (In the Washington metropolitan area, the average number of workers per household is about 1.6 – probably due in part to high housing costs.)9 

 

If the consultants’ latest, proposed development vision were fully realized, the result would be about a 17 percent greater imbalance by 2035 -- about 3.8 jobs per housing unit in the Town (38,685 workers and 10,119 housing units). The ratio in the 38-acre study area in 2035 would be at least 5.7:1 (13,425 new workers and 2,357 new housing units).10  Among the adverse consequences of jobs-housing imbalances to the Town are that:



• Housing prices become increasingly inflated, pushing some current workers out of the Town’s rental housing and increasing the already-excessive housing costs for many others;
• As mentioned, traffic congestion is much greater, due to high levels of commuters from outside the Town; and
• Economic development in the Town is hampered, because people who want to live near their jobs, but cannot do so, spend most of their income near where they are able to live. 

Also, in the long run commercial areas that lack adequate housing may lose their vibrant commercial base, as businesses move closer to where the workforce lives.

 

The rapid, predominantly commercial buildup planned for the Route 28/CIT Metrorail station area also will add to the demand for housing in the Town. As mentioned, there will be added pressure from people who want to commute by Metrorail to jobs elsewhere on the Silver Line and beyond.

 

Currently, the Reston-Dulles rail corridor has an astronomical jobs/households ratio of more than 11 to 1. And Tysons Corner’s current ratio is more than 12 jobs per household (approximately 105,000 jobs and 8,500 households). Although those ratios will be coming down somewhat, based on plans for transit-oriented developments in Tysons and Reston, there still will be many more workers who cannot be housed locally than there are now, based on current projections.

 

Overall, Fairfax County generally has had the largest excess of jobs over housing units in the Washington area. As discussed below, when making its housing plans, Herndon must consider the current and future housing needs of Fairfax County and Northern Virginia generally. People commute to work from, and to, points throughout Northern Virginia – and beyond. Among the consequences for people outside the Town of inadequate housing supply within the Town are:

  • More extremely long commutes for many workers; 
  • More suburban sprawl, with its destructive effects on the environment;  
  • Higher and more volatile housing prices; and 
  • More poverty and homelessness in the general area.11

 

3. The recommendations fail to encourage any residential units affordable to low- and moderate-income households

 

A commonly used means to reduce the shortage of housing units affordable to low- and moderate-income people is to require a certain percentage of units in large, new residential developments to be affordably priced. The recent Tysons Corner redevelopment plan currently requires that 20% of residential rental development be affordable to such people. (The requirements are slightly different for homeownership units.)

 

The 20% “affordable” requirement previously has proven feasible in transit-oriented developments (TOD’s) similar to Herndon’s and Tyson’s Corner’s. (The County also has had success with 12% and 6.5% requirements for large, new residential rental developments.)

 

There is no net loss to the landowner or developer due to such requirements (sometimes called ADU or Workforce Housing requirements), because a density bonus is given. Thus, more residential units may be built and sold in the development than otherwise would be permitted. Any losses on “affordable” units are offset by profits on the extra market-rate units. The affordable units are the same in size and quality as the market-rate units in the development.

 

Our organization can provide further information upon request. Also, expertise on such issues could be provided by County, state and even federal agencies, and by many knowledgeable private organizations.



4. The recommendations exemplify planning problems identified by GMU

 

The consultants’ recommendations appear to have done just about everything that GMU says not to do, with regard to housing planning. Those recommendations:

  • Plan for an insufficient amount of housing to accommodate the planned future workforce – especially multi-family housing, which is smaller and relatively more affordable than large-lot, single family housing; 
  • Create the need for more housing located far from most of the new jobs; 
  • Contribute unnecessarily to worsening traffic and quality of life, by not including enough housing to absorb traffic congestion within the Town, and reduce urban sprawl outside the Town, to the extent feasible; and 
  • Threaten the Town’s and the region’s economic vitality, by hampering the healthy, local economic development of goods and services that accompanies sufficient housing.

Thus, the Town’s current process exemplifies each of the basic planning problems that GMU criticizes in its recent, comprehensive report on housing the area’s future workforce. To quote GMU’s conclusions:

  1. Local jurisdictions are planning for an insufficient amount of housing to accommodate future workers.
  2. More housing is needed closer to jobs, in existing and growing regional employment centers.
  3. There is a need for more multi-family housing and smaller, more affordable owner and renter homes in the region. 
  4. A lack of a sufficient supply of housing contributes to worsening traffic and quality of life and threatens our region’s economic vitality.12   

 

5. Apparent noncompliance with Virginia Code planning requirements
for affordable housing

 

Like the Town’s Comprehensive Plan (CP), the current recommendations apparently fail to address the following, mandated subjects under the Virginia Code’s comprehensive plan statute: 

 

The plan shall include: the designation of areas and implementation of measures for the construction, rehabilitation and maintenance of affordable housing, which is sufficient to meet the current and future needs of residents of all levels of income in the locality while considering the current and future needs of the planning district within which the locality is situated.

 

Virginia Code section 15.2.2223 (emphasis added).13  The term “planning district” here means the state Planning District for Northern Virginia, from Arlington and Alexandria to Loudoun and Prince William Counties.14

 

Further, the exclusionary effects of prohibiting residential development in the entire area beyond the 38-acre core seem questionable under the precedent of the Virginia Supreme Court. That Court has expressed concern about land use policies in Fairfax County that have contributed to the long-standing housing shortage there. In one decision, which invalidated the Fairfax County Board’s denial of a residential rezoning application in the face of the housing shortage, the Court stated:

 

Another discriminatory effect, although perhaps unintended, of the  Board’s zoning policies was to elevate the cost of building sites and housing and thus tend to exclude from portions of Fairfax County those persons who do not have the 'substantial means' to 'afford to move into the County.' Zoning action with similar exclusionary effect was held impermissible in Board of Supervisors of Fairfax County v. Carper, 200 Va. 653, 660, 107 S.E.2d 390, 395 (1959).

 

Board of Sup'rs of Fairfax County v. Williams, 216 S.E.2d 33, 216 Va. 49, 60 (Va., 1975) (invalidating Fairfax County denial of residential rezoning application as arbitrary and capricious). The Planning Commission’s current recommendations would put an unnecessary degree of upward pressure on housing prices, by making no provision for affordable units and by worsening the existing imbalance of jobs in the Town over residential units.  Thus, those recommendations would increase housing costs and exclusionary effects unnecessarily for persons who work in the Town of Herndon but “who do not have the 'substantial means' to 'afford to move into the County.'”


More multi-family housing units apparently would
have no significant impact on Town finances

 

The impact on the Town’s finances, if residential development were permitted beyond the 38-acre core, apparently would be insignificant. Based on the consultants’ figures, the new units permitted under the current consultants’ recommendations would create a net annual cost to the Town of about $106 per unit.15   At the same time, the Town apparently would realize a net gain of almost $6.5 million annually from the labors of the new workers and their commercial enterprises, in the 38-acre study area alone.16

 

And that doesn’t include non-recurring revenues, which could total millions of dollars in 2035 alone.17  The Fairfax County government would realize even more net revenue, above the costs of its services to the new development, than the Town would – and an even better ratio of revenue to costs. The County’s net revenue by 2035 is estimated by the Town’s consultants to be more than $32 million annually.18 

 

Conclusion

 

Inviting into Herndon the proposed, lucrative new commercial development, while failing to take reasonable (and even legally required) measures to ease the Town’s serious housing shortage and excessive housing prices, would seem a bit “greedy,” in the broadest sense of the term. We hope the Town of Herndon will not go down that road.

 

Thank you very much for your attention to all these matters. We wish you every success in resolving the remaining issues in this planning effort.

 ______________

 

1. See, e.g., Reston Master Plan Special Study Development Scenarios, posted at:
 http://www.fairfaxcounty.gov/dpz/projects/reston/scenarios.htm (the more “Residentially Intensive” scenario is Scenario 2).

 

2.  See, e.g., studies analyzed in American Planning Association Advisory Service Report 516, Jobs-Housing Balance, pp. 9-14 (2003), posted at http://www.planning.org/pas/reports/subscribers/pdf/PAS516.pdf.

 

3. Under the consultants’ (“VHB’s”) current recommendations, all of the original study area except the 38-acre HTOC would retain its current O & LI (office and light industrial) or PD-B (planned development—business) zoning classification, and thus would be off-limits to residential development. Draft #3 at p. 121. Furthermore, VHB recommends that any planning amendment to permit residential development in that outer area (called the “Potential Transit Related Growth Area” (TRG)) not be considered until “after the opening of the Metro station at Herndon.” Id. That would put off the first step in the  planning process for that area until 2016 or later. (It is not clear that the Metrorail will open in 2016, as currently projected.) 

 

And when residential or other redevelopment in that area is considered, VHB “foresees a need for a studied comprehensive planning approach to the future of the area. These highly visible properties . . . warrant excellent urban design and state of the art planning principles.” We approve of state-of-the-art planning principles. Among them are balancing commercial development with ample residential development in the community, which we recommend that the Town at least consider before adding unnecessarily to the housing, traffic, and environmental problems both in the Town and the surrounding area. See, e.g., American Planning Association, (APA), Policy Guide on Housing, General Policy Positions ##1 and 2 (2006); Advisory Service Report 516, Jobs-Housing Balance (2003), posted at http://www.planning.org/pas/reports/subscribers/pdf/PAS516.pdf.


4.Unfortunately, our representative had to leave the meeting early – at about 10:20 p.m., after most other audience members had left. We also were unable to attend the Feb. 6 public hearing.


 
5. Draft #3 at p. 10.

 

6. If the Town balanced the number of housing units with the number of workers in the Town, it could at least claim that it is providing its fair share of housing. Of course, Fairfax County’s overall, predominantly-commercial development pattern magnifies the affordability challenges in localities such as Herndon. 

 

7. The Town’s Comprehensive Plan (CP) proceeds from a baseline of approximately 25,260 jobs and 7,762 housing units in early 2008. Town of Herndon 2030 Comprehensive Plan, p. II-3 (August 12, 2008).

 

8. American Planning Association Advisory Service Report 516, Jobs-Housing Balance, p 4 (2003), posted at http://www.planning.org/pas/reports/subscribers/pdf/PAS516.pdf.

 

9. For further specifics on recent jobs-housing ratios in the Town and the general area, please see my letter to the Planning Commission of about a year ago (January 27, 2011), concerning housing considerations in the Metrorail-area planning.

 

10. Our calculations use the Town’s conversion rates for average square feet (sf) of development: 1,200 sf per housing unit; 250 sf per worker for offices; 500 sf per worker for retail space; and 625 sf per worker for hotels.

 

11. Lack of housing within the price range of low-income people has long been a leading cause of both problems -- even though some low-income people (like the rest of the population) have other issues, including addictions and/or mental conditions. See, e.g., U.S. Conference of Mayors, 2010 Status Report on Hunger & Homelessness, p. 2 (2010).

 

12. George Mason University, Center for Regional Analysis, Housing the Region’s Future Workforce , p. 3 (http://66.147.244.232/~lifeats1/cra/pdfs/studies_reports_presentations/Housing__the_Regions_Workforce_Oct_2011.pdf) (Oct. 25, 2011). 

 

13. “Affordable housing” means “housing that is affordable to households with incomes at or below the area median income,” costing the occupant “no more than thirty percent of his gross income for gross housing costs, including utilities.” Va. Code § 15.2-2201. Thus, “affordable housing” refers to more than just subsidized housing. A key to making housing as affordable as possible, in a growing job market such as Northern Virginia, is to plan for enough housing to balance job growth.

 

14. See Va. Code § 15.2-2201 (defining "planning district commission" as “a regional planning agency chartered under the provisions of Chapter 42 (§ 15.2-4200 et seq.) of this title.”) The Planning Districts and their Commissions are described at: http://www.commonwealth.virginia.gov/StateGovernment/BlueBook/2010-2011/Planning%20Districts.pdf.


15. See BBP LLC, “Fiscal Impact Analysis” at 7 (Dec. 14, 2011) (Appendix C to Draft #3 at p. 203). As of 2035, annual revenue from the new residences would total nearly $1.2M, all from residential real estate taxes. The estimated annual costs of providing services to residents would total about $1.44M, as of then. So, the net annual cost to the Town of the possible 2,357 new housing units is a bit under $250,000. At that rate, the Town would have an average net annual cost of about $106 per unit. (All figures are based on 2011 dollars.)

 

16. See BBP LLC, “Fiscal Impact Analysis” at 2, 7 (Dec. 14, 2011) (Appendix C to Draft #3 at 198, 203). Revenues from all commercial sources would total an estimated $9,859,138 ($6.2 million from commercial real estate taxes + $2,077,800 from (BPOL (Business/Professional/Occupational Licenses) taxes) + $1,146,638 from the hotel occupancy tax + $434,700 from the meals tax). The total cost of all Town services to commercial entities would an estimated $3,374,388. Thus, the net gain would be $6,484,750.

 

17. See id. at pp. 8-10 (Appendix C to Draft #3 at 204-206).

 

18. See id. at p. 11, Ex. 15 (Appendix C to Draft #3 at 207).